British energy major Shell (SHEL) on Tuesday projected that global liquefied natural gas demand is expected to rise by around 65% by 2050 from 2025 levels to almost 700 million metric tons a year, citing the continued reliance on gas for flexibility and reliability.
In its LNG Outlook 2026, Shell forecast the entry of about 180 million metric tons of new annual supply by the end of this decade but added that "the ability to benefit from new supply will depend on the availability of infrastructure in importing countries, including regasification capacity and pipeline connectivity, especially in South and Southeast Asia."
"To meet the growing demand, significant additional investment will be needed in new LNG liquefaction plants through the 2030s and 2040s, with around 200 million metric tons a year of new supply needed, in addition to projects already under construction," the report added.
Demand from South and Southeast Asia is expected to account for about 40% of global LNG imports by 2050 due to the region's requirement for lower emission sources to meet energy needs, while demand in mature Asian markets like Japan is likely to be driven by data centres, Shell said.
Meanwhile, demand from bunkering is projected to see a seven-fold growth to 27 million metric tons by 2035, higher than India's 2025 imports volume.
In Europe, LNG is expected to remain vital for the continent's energy security, helping balance intermittent renewables amid a decline in domestic gas production.
Severe disruptions to LNG shipping due to the effective shutdown of the Strait of Hormuz, which accounts for one-fifth of global LNG flows, dented expectations of a significant increase in LNG trade this year, compared with overall 422 million metric tons traded in 2025.
However, total LNG trade in 2026 could still end at last year's levels before rising next year, if flows via the Hormuz Strait normalize this summer, with new liquefaction plants in North America, better output from existing facilities, and lower LNG imports in Asia having partly mitigated the impact of reduced Middle Eastern supply, Shell said.
Spot LNG markets have displayed great resilience, with prices in Asia rising to over $20 per million British thermal units at the height of the Middle East crisis, relatively significantly lower compared with 2022 when Russia's invasion of Ukraine led to a disruption in supplies.
With about two-thirds of LNG trade relying on long-term supply agreements, buyers paid an average of $11-$12 per MMBtu in May, compared with $7-$11 in January before the conflict began, Shell said.